Household food demand analysis: a survey of semiurban and rural households in south-west Nigeria

  • B.T Omonon
  • N.M Nkang
  • F.A Ajao
Keywords: Household demand, elasticity, expenditure, food, LA-AIDS model.

Abstract

A two-stage Linear Approximate-Almost Ideal Demand Systems model was used to analyze household food demand in semi-urban and rural households in south-west Nigeria based on micro-level data from a multi-stage random sampling survey of one hundred and sixty two households. Aggregate food demand indicates inelastic sensitivity to price changes with the exception of grains. Individual food commodities, in the main, exhibit both price and income elastic behaviour. Expenditure elasticities ranged between o.6670 and 18.2224, were found to be generally higher than price elasticities. There was evidence of strong complementary relationships between individual food items. It is advocated that production of the set of price inelastic food items should be boosted, at least to a level where producers would not be forced to increase prices to the disadvantage of consumers. In like manner, increased supply of the highly price-elastic commodities would benefit both the consumer and the producer in that an accompanying reduction in prices with increased supply would lead to a higher margin of demand than the fall in price. Finally, it is suggested that food demand problems in the study area may be addressed more effectively via income rather than price policies, especially for luxuries such as meat/fish.
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